COMPETITION: THE WAYS TO PERFECTION

In the economic literature of the nineteenth and twentieth centuries, perfect competition rests on essentially two different types of foundations, the distinction of which has not always been emphasized enough. According to the first type, perfect competition prevails when the agents, small relative to the market, completely lack the power to influence their environments, be it in a cooperative or a non-cooperative context. According to the second, perfect competition results from the agents’ normal conduct, independently of their size: either peaceful price taking or, on the contrary, aggressive undercutting. The paper reviews and compares briefly these different categories of foundations.